FDI attraction in Chile Affected by the Country's Socio-Economical Essay

FDI attraction in Chile Affected by the Countrys Socio-Economical Inequality - Essay ExampleIn 2006, the nominal GDP per capita of Chile was recorded as the senior high schoolest in Latin America. The country however is undergoing a lot of sparing disparity (Trading Economics, 2013b). The socio stinting discrepancy is the gap between the rich and the poor. The income difference of a group of individuals, society or the residents of a country is called the socio economic inequality. The economic inequality varies by the economic structures of the countries (Mankiw, 2009). consort to several economists the inequality of the diffusion of wealth is very essential. This improves competition and increases the efficiency of the individuals. The wealthier individuals tend to save more and spend more which helps the economy in growing. Inequality amongst the individual also increase the social and health related problems of the individuals. The economic growth of a society is also affec ted (Froyen, 2009) The social inequality has a direct impact on the social cohesion of the individuals, the populations productivity and crime rate of the society, cultural and civic participation and economic welfargon as a whole (Wessels, 2000). The analysts such as Martinez (2011) are of the view that high growth rate is no excuse for the economic inequality. According to a recent report about three million Chileans are very poor. About 500,000 of the people of the Chilean population are those who are highly poor. The economic model of Chile and the progressive growth which the economy has shown with time is sufficiently appraisable but still the growing inequality in Chile has caught help of various economic analysts. Chile is categorised amongst a a few(prenominal) countries which have a worst income distribution system. The percentage of the poor population is very high in the economy (OCED, 2002a). According to OECD (2002b), Chile is a nation of population of more than 17 million people. It comes under the category of developed countries and has the worst income distribution system amongst those countries. Several economists are of the view that the economic system of Chile would not improve by the economic growth. To improve the economys income distribution the government would have to take decisions to redistribute the wealth of the individuals by placing higher taxes. Another economist was of the view that Chile must focus on economic growth and nothing else. The increase in the level of the per capita income of the individuals will surely increase the well being of the individuals. The person who is a resident of Chile and lives on less than $64,134 pesos (US$135) per month is considered to be poor. But a person who lives on less than $32,067 pesos (US$67) monthly is considered to be destitute, according to the official data (Martinez, 2011). A few of the economists are of the view that creating opportunities is a part of the economic growth. Tho se who are utilising that opportunity are competent. For the incompetency of the rest of the individuals it is unfair to impose taxes and burden those individuals who prove themselves and are the contributing factors fro the economy. ETHICAL FAMILY INCOME TO IMPROVE SOCIETY Felipe Kast, minister of planning for Chile called the ranking by the OECD (2002b) report shameful for its levels of inequality. He added that Chile has plans set in line to take the people out from extreme poverty. The government plans a program of IEF Ethical Family Income which will use a series of bonds and cash incentives for the children